The Impact of the Raise the Wage Act of 2023, by Congressional District
What does the Raise the Wage Act of 2023 do?
The federal minimum hourly wage is just $7.25 and has not increased in 14 years, the longest period of congressional inaction in the history of the minimum wage. As a result, the real, cost-of-living-adjusted value of the minimum wage has fallen by 30%.
The Raise the Wage Act of 2023, introduced in the U.S. House of Representatives and U.S. Senate on July 25, 2023, would raise the federal minimum wage to $17 an hour by 2028. The bill would also gradually raise and then eliminate subminimum wages for tipped workers, workers with disabilities, and youth workers, so that all workers covered by the Fair Labor Standards Act (FLSA) would be at the same wage level.
What would its impact be?
EPI’s analysis shows that a $17 minimum wage in 2028 would raise the wages of 27,858,000 workers across the country, or about 19% of the workforce. The increases would provide an additional $86 billion annually in wages for the country’s lowest-paid workers, with the average affected worker who works year-round receiving an extra $3,100 per year.
How many workers would benefit in each congressional district?
Table 1 shows the number and shares of workers in each congressional district who would receive wage increases if the Raise the Wage Act of 2023 were enacted into law.
Why are workers in some states less likely to be affected?
In summer 2023, 19 states and localities implemented minimum wage increases based on state, local, or municipal laws that already set the minimum wage higher than the federal standard. In total, 30 states and the District of Columbia have a minimum wage above the federal minimum, and many more localities have minimum wages above their state minimum wage. Workers in most of these states will still benefit from a $17 federal minimum wage, but the effect is muted because low-wage workers in those states have already seen wage increases above the federal minimum.
California, the District of Columbia, Hawaii, and Washington all have state- or municipality-level minimum wage laws that will set minimum wages close to, or above, the Raise the Wage Act’s proposal of $17 by 2028. Because of this, only a small number of workers in those states would be directly affected by the federal policy as state/local laws will have already raised the wages of low-wage workers in those jurisdictions. Because of the smaller impacted population, more detailed impact estimates are unavailable for those states. (Cells for which data are unavailable are marked with * in Table 1.)
Why is it critical that the Raise the Wage Act be passed?
As EPI’s state-by-state minimum wage tracker shows, raising the federal minimum wage is critical to protect workers (especially in the South) who have been left behind. A higher federal minimum wage can build on existing state-level standards and lock in the wage gains made by low-wage workers in the economic recovery from the COVID-19 pandemic.
Assumptions and documentation for EPI’s Minimum Wage Simulation Model
- The estimates are for the year 2028, when the policy’s regular minimum wage is $17 and the tipped minimum wage is $15.
- The underlying wage distribution is based on the 2022 Current Population Survey.
- The underlying geographic data is based on the 2015–2019 American Community Survey (ACS), reweighted to match 2019 ACS-based gender-specific employment counts of congressional districts for the 118th Congress.
- The simulation assumes nominal wage growth will be at a 5.0% annual rate between 2022 and 2023, and at an annual rate of 0.5% plus projected CPI growth in subsequent years.
- The simulation accounts for estimated effects of projected state and local minimum wages between 2023 and 2028.
- To read more about the EPI Minimum Wage Simulation Model, see the description in Cooper, Mokhiber, and Zipperer (2019).
Ben Zipperer joined the Economic Policy Institute in 2016. His areas of expertise include the minimum wage, inequality, and low-wage labor markets. He has published research in The Quarterly Journal of Economics and the Industrial and Labor Relations Review and has been quoted in outlets such as The New York Times, The Washington Post, Bloomberg, and the BBC.
Prior to joining EPI, Zipperer was research economist at the Washington Center for Equitable Growth. He is a senior research associate at the Center for Economic and Policy Research, a research associate at the Center on Wage and Employment Dynamics at the University of California, Berkeley, and an associate at the Johns Hopkins Bloomberg School of Public Health.
EPI is an independent, nonprofit think tank that researches the impact of economic trends and policies on working people in the United States. EPI’s research helps policymakers, opinion leaders, advocates, journalists, and the public understand the bread-and-butter issues affecting ordinary Americans.
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